New Home Loan: Preparing for Mortgage Closing Costs

by Kelly Richardson Columnist

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If you are attempting to secure a new home loan, you need to know what will be expected of you in terms of closing costs. Make your mortgage successful by being prepared to pay your closing costs when the time comes to seal the deal.

One of the tensest periods of time during the process of obtaining a new home loan is the closing. Closing is when all interested parties in the deal, usually the borrower and the lender, meet to sign documents and settle any appertaining business. This business also includes closing costs. Closing costs are the fees associated with establishing a mortgage and exchanging property ownership. Closing costs are made up of several fees typically paid for by both the buyer and the seller as stipulated by the mortgage contract. Once closing costs are paid, the home loan is officially in effect. Here are some of the fees included in mortgage closing costs.

Mortgage Closing Costs Basics

  • » Attorney Fees. Lawyers get their piece of the pie for representing both sides during the closing of a new home loan.
  • » Brokerage Commission. If you use a mortgage broker, they will take their fees out of the closing costs of your mortgage.
  • » Mortgage Application Fees. Mortgage companies charge these fees to handle the processing of your new home loan application.

These are just a few of the fees that will be included in the closing costs. You will get a comprehensive list from your representation that includes every fee included in these costs. Here are some ways to reduce closing costs.

Saving Closing Costs on Your New Home Loan

  • » Waiving Junk Fees. Document processing fees can usually be waived by a motivated mortgage lender.
  • » Negotiate Fees. Negotiate how much of these new home loan closing costs you are willing to pay for with the seller.
  • » Skip Mortgage Life Insurance. You can get a better rate of coverage through an independent carrier.

The closing costs of a new home loan are much less intimidating if you know exactly what will be expected of you at closing.

About the Author

Kelly Richardson covers the local education and technology scenes in major cities across the country. His articles appear in educational journals, periodicals, and e-zines.

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